How Your Restaurant Can Survive the Pandemic: Get the Most Out of Your SWOT Analysis
In the previous article- PART-1 of Three-Part Series How Your Restaurant Can Survive the Pandemic: A SWOT Analysis Can Help you learned; Why use a SWOT analysis & Why NOW? Also, we discovered the benefits of using this tool for your restaurant business.
In this article, we will explore:
· How to DO a SWOT analysis?
· Industry best practices How to USE it effectively?
So, let’s dig In.
How to DO a SWOT analysis?
Now that you know what a SWOT is, let’s look at each area in more detail and consider what types of questions you could include in your brainstorming exercise.
STEP 1: Find Your Strengths
The strengths of a restaurant are internal and positive. Strengths are those your restaurant do particularly well in a way that differentiates you from your competition. They are an integral part of your business which make your restaurant “TICK”.
What do you do better than anyone else? What values drive your business? What lowest-cost resources can you draw upon that your competition can’t? Identify your restaurant’s Unique Selling Advantage or more popularly known as USPs, and add this to the Strengths section.
The more strengths a company has, the less risk it will bring. Seems obvious right?
Here are my favourite questions you can include part of the “Finding Your Strengths” brainstorming exercise.
1.) What do I think our restaurant does better than any competitors out there?
2.) What do our Customers think our strengths are?
3.) What do our Staff think our strengths are?
4.) What do our Suppliers think our strengths are?
STEP 2: Find Your Weaknesses
The famous quote “You are only as strong as your weakest link” is very relevant in this case. Weaknesses inside your restaurant business will increase that risk. Identifying weaknesses early is critical, so you can take action and correct them. Think about what you could improve, and the sorts of practices you should avoid.
The weaknesses of a business are internal and negative. Being brutally honest is very important! A SWOT Analysis will only be valuable if you gather all the realistic information.
Zeroing in on your negatives isn’t going to be a pleasant experience (no one likes to acknowledge their flaws), but getting those weak points out in the open is the only way to accept and overcome them.
Weaknesses, like strengths, are inherent elements of your restaurant, so focus on your people, resources, systems, and procedures.
Here are my favourite questions you can include part of the “Finding Your Weaknesses” brainstorming exercise.
1.) What does our Accountant think our biggest problem is?
2.) What do I think our restaurant does a POOR job of?
3.) What do our Customers think our weaknesses are?
4.) What do our Staff think our weaknesses are?
STEP 3: Find Your Opportunities
“Opportunities are like sunrises. If you wait too long, you miss them”- William Arthur Ward.
The characteristic of a restaurant with the most significant market share in the town is, it’s the ability to actively spot and exploit opportunities earlier than its competition.
Think about good opportunities you can spot in this shifting restaurant industry. These don’t need to be game-changers: even small advantages can increase your restaurant’s competitiveness.
What interesting market trends are you aware of, large or small, which could have an impact?
Watch out for government policies changes, consumer behaviour changes, social patterns, population profiles, and lifestyles can all create exciting opportunities.
Restaurants can take advantage of opportunities even though they are affected by an external environment.
Here are my favourite questions you can include in the “Finding Your Opportunities” brainstorming exercise.
These questions will help you figure out what trends or opportunities will be around in the near future or currently available to capitalise.
1.) What Long Shot Opportunities could we take?
2.) What New Trends are catching on?
3.) What New menu items or services could we offer?
STEP 4: Find Your Threats
Lastly, yet critically, you need the identify all possible threats to your business. Threats are external factors that can negatively impact your restaurant and increase the risk of your venture being unsuccessful even though you cannot control them.
Uncapitalised opportunities can become a threat to your restaurant by the risk of losing your valued customers to your competition.
It is timely to mention that evolving technology is an ever-present Threat if you don’t change and neglect it, as well as it can be an Opportunity if you spot the trend and adopt it.
Think about the barriers you face in getting your offerings to market and selling. The more you stay observant about what could reduce your restaurant’s profitability, the better prepared you will be to put out the fire before it catches you off guard.
Make sure to explore the external challenges your restaurant is exposed to. E.g. Having cash-flow problems, changes in government legislation. These could make you vulnerable to even small changes in the industry. This is the kind of threat that can seriously damage your business, so be vigilant.
It’s vital to anticipate threats and take action against them before becoming victims and your restaurant growth stalls.
Below are my highly recommended questions to include part of the “Finding Your Threats” brainstorming exercise.
1.) What should we be Afraid of in the next 6 to 12 months?
2.) What Major Trends are we not capitalising?
3.) Where can our Competition crush us?
Industry best practices How to USE it effectively?
Now, let’s look at some of the best practices of using the SWOT analysis.
1. Lock in the Dates: First and foremost schedule the dates in your planner to use this tool at least twice a year. First, at the beginning of the year to “Analyse” your business’s current status. Second, in the middle of the year to “Follow-up” to ensure you are on track with the Action Plan to achieve the year’s business objectives.
2. Decide on the purpose: To get the most out of your SWOT analysis, you should have a problem which requires a solution or a goal in mind from the start. For example, you could use this tool to help you decide if you should invest money and time to introduce a catering service, extend trading hours or change your internal processes, e.g. online staff training system etc.
3. Research your Restaurant, Industry and Market: Before you begin the SWOT analysis, you need to do thorough research to understand your business, industry and market. Get different perspectives by talking to your staff, suppliers, fellow restaurateur colleagues, accountant and regular customers. Also, conduct some market research and find out about your competition.
4. List Strengths & Weaknesses: Both, Strengths & Weaknesses are internal factors of your business; it is best to start listing these two first. At this stage of the SWOT analysis, the list does not need to be definitive. Any ideas and thoughts are encouraged. You will prioritise the list in Step 6.
5. List Opportunities & Threats: Once you list the internal factors, it’s time to list all the External factors. An Opportunity for one aspect of your business could be a Threat to another. But for the SWOT analysis, the same item shouldn’t be listed as both. Examples of threats could include rising unemployment, increasing competition, higher interest rates, and global markets’ uncertainty. Opportunities could consist of new technology, training programs, collaboration, a diverse marketplace, and government change.
6. Establish priorities from the SWOT: When you have completed the steps above, you will have 4 separate lists. Ideally, these lists can be displayed side-by-side to have an overall picture of how your business runs and what issues you need to address. You can then work out what problems are the most important and what can be dealt with later. Develop 4 prioritised lists.
7. Develop a strategy to address the SWOT issues: Time to look for potential connections between your matrix’s quadrants. Review your 4 prioritised lists by asking:
• How can we use our Strengths to take advantage of the Opportunities identified?
• How can we use these Strengths to overcome the Threats identified?
• What do we need to do to overcome the identified Weaknesses to take advantage of the Opportunities?
• How will we minimise our Weaknesses to overcome the identified Threats?
• Could we use some of the Strengths to open up further Opportunities?
• Would more Opportunities become available by eliminating some of your Weaknesses?
Once you finalised the lists, you should now create an Action Plan to achieve your business goals.
What’s next?
I believe now you have a thorough understanding of how to DO a SWOT analysis and some of the industry best practices for How to USE the tool effectively.
Continue to read on PART 3 to learn:
· SWOT analysis — LIVE Restaurant Example
· Ready to use Downloadable Template
Read on here: How Your Restaurant Can Survive the Pandemic: SWOT Analysis with Live Example & Ready To Use Template
Research References:
